What is a default notice?
A default notice is a formal letter your lender must send under the Consumer Credit Act 1974 before they can act on missed payments on a credit agreement such as a loan, credit card, or car finance. It has to give you at least 14 days to put things right. If you clear the arrears in that time, the law treats the default as if it never happened.
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A default notice is a formal letter your lender must send under the Consumer Credit Act 1974 before they can act on missed payments on a credit agreement such as a loan, credit card, or car finance. It has to give you at least 14 days to put things right. If you clear the arrears in that time, the law treats the default as if it never happened.
Last reviewed: July 2026 · Written in plain English, checked against gov.uk · Information only, not legal advice
Default Notice: the essentials
- What it isA formal warning you've breached a credit agreement
- Legal basisConsumer Credit Act 1974, sections 87–88
- Time to fixAt least 14 days from the notice
- If ignoredThe account defaults and is reported
- Credit fileA default stays for 6 years
Why have I received a default notice?
A lender sends a default notice when you've fallen behind on a regulated credit agreement and they mean to take it further, whether that's ending the agreement, demanding the full balance, or passing the debt on. It usually turns up after a few months of missed or reduced payments, not a single late one. The notice must set out how much you owe, what you need to do to put it right, and the date by which you must act. Read those details carefully, and if anything looks wrong, raise it with the lender straight away.
How long do I have, and what happens if I pay?
The notice has to give you at least 14 days from the date it's served to clear the arrears. This minimum was raised from 7 to 14 days by the Consumer Credit Act 2006. Pay what it asks within that time and the breach is treated in law as if it never happened, so the account carries on as normal. If you can't pay in full, contact the lender before the deadline. They may accept a payment arrangement, and asking early looks far better than letting the account default.
What does a default do to my credit file?
If you don't put things right, the lender can register a default with the credit reference agencies. This is separate from the Consumer Credit Act notice itself, but it usually follows. A default stays on your credit file for six years from the date it's recorded, even if you later pay the debt off, and it can make it harder to get credit, a mortgage, or sometimes a mobile contract. That's why it's worth doing everything you can to clear the arrears before the deadline.
What happens if you ignore it?
If you ignore a default notice, the lender can end the agreement, demand the whole outstanding balance at once, register a default on your credit file for six years, and pass the debt to a collection agency or take you to court for a County Court Judgment. Acting within the 14-day window, by paying the arrears or agreeing an affordable arrangement, is almost always cheaper and less damaging than waiting for the account to default.
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See what your letter means — freeFrequently asked questions
Is a default notice the same as a CCJ?
No. A default notice is an early warning from your lender. A CCJ (County Court Judgment) only comes later, if the creditor takes you to court and you don't respond or pay.
Can I remove a default from my credit file?
Only if it was recorded in error. A correctly registered default stays for six years from the default date, then drops off automatically even if the debt is unpaid.
What if I can't afford to clear the arrears?
Contact the lender before the deadline to ask for a payment plan, and get free advice from StepChange or National Debtline. They can negotiate for you.
Official sources & free help
For the full detail — and free, independent advice — see: